Demand Functions Are "Homogeneous of Degree Zero in All Prices

question 36

Multiple Choice

Demand functions are "homogeneous of degree zero in all prices and income." This means

• A)a proportional increase in all prices and income will leave quantities demanded unchanged.
• B)a doubling of all prices will not alter consumption decisions.
• C)prices directly enter individuals' utility functions.
• D)an increase in income will cause all quantities demanded to increase proportionately.

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Definitions:

Stratification System

The hierarchical arrangement of individuals or groups in society, based on wealth, power, race, education, etc., that affects their access to resources and opportunities.

Equality Of Opportunities

The principle that all individuals should have the same chances to succeed in life, regardless of their background, race, gender, or other personal characteristics.

Professionalization

The process of developing or elevating an occupation to a professional status, requiring specialized knowledge and often formal qualifications.

Credentials

Certifications or qualifications that prove a person's identity or qualifications in professional or academic fields.